At the time of the commitment, only the funding obligations and contractual maturities are certain. Actual funding requirements are uncertain and spread over time. With uncertain timing and amounts of distributions, returns are exposed to market and duration risks.
You can't trade future Net Asset Values.
There is no way to predict a given level of invested capital at a future date, due to the variability of cash flows.
You can't trade IRRs.
Internal Rates of Return can't be traded over time (lacking proper reference to time and underlying amount).
You can trade DARC Yields, spot and forward.
Yields transfer the exact economic interest of a fund, spot and forward, conditionally and unconditionally in a seamless way.
You can settle in kind or with cash.
Contracts will allow flexibility to deliver or receive the cash payment or the fund / portfolio interest, as agreed by the parties.
YIELD DERIVATIVES
Designed to perfectly match private funds' forward, self-liquidating structures
Commitment is Spot
Capital Calls are Forward
Distributions are Forward